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Tuesday, 28 June 1994
Page: 2152


Senator BELL (10.22 p.m.) —by leave—I move:

(1)Clause 8, page 5, proposed subsection 170EE(3), lines 27 to 42, omit the subsection, substitute the following subsection:

  "(3)In working out the amount of the compensation for the purposes of subsection (2), the Court is to have regard to the remuneration that the employee would have received, or would have been likely to have received, if the employer had not terminated the employment, but the amount of compensation in respect of any employee must not exceed whichever is the greater of the following:

    (a)the amount of the remuneration that would have been received by the employee in respect of the period of 6 months that immediately followed the day on which the termination took effect if the employer had not terminated the employment and the employee had continued to receive remuneration in respect of the employment at the rate at which he or she received remuneration immediately before the termination took effect;

    (b)the applicable amount on the day on which the termination took effect.".

(3)Clause 8, proposed subsection 170EE(7) lines 16 to 19, omit the subsection.

(4)Clause 8, page 6, proposed subsection 170EE(8) definition of "relevant award" line 21, omit the definition.

Our amendments aim to make the compensation cap fairer. We are proposing that the maximum amount a person can claim cannot be reduced lower than $30,000. The amendments state that any employee can claim $30,000 or six months salary, whichever is the greater. For the opposition's enlightenment, I emphasise that this benefit applies equally to award and non-award employees.

  The reason for this change is that any cap will unfairly disadvantage a small minority of employees who will not be adequately compensated even when they receive the maximum possible amount. I have previously given examples, such as long-serving employees who would otherwise have received larger redundancy payments, people in higher age groups who are several years from retirement but who have no realistic prospect of re-employment, and also people who have low skill levels and therefore have reduced prospects of re-employment.

  For those people, the only way to claim more than the cap allows is to take a common law action, but the threshold costs of taking a common law action are high. If somebody on $20,000 a year believes he is entitled to 12 months salary, the legal cost of doing so via the common law would be so high that the claim would not be worth pursuing. For somebody who is earning $50,000 a year, a common law claim for 12 months salary is therefore much more viable. We have rehearsed that; we have gone through that. It seems as though the chamber actually agrees with it. I want to see whether the chamber is prepared to vote to achieve a redressing of that injustice.

  The fact is that common law action is very expensive and the costs do not fall if the income of the person taking the action is low. It is the Democrats' view that the cap should not be able to fall below a certain amount, and that should be the amount at which common law action is still a viable alternative. We have decided that that figure is $30,000, and that is what these amendments seek to achieve. We have put this forward as a test of the commitment of the government and the opposition to fairness and access to justice. It seems to us that both major parties have a great deal of difficulty in matching their rhetoric with action in those areas of fairness and access to justice.